Silicon Valley earned its name and first great fortune as the cradle of the computer age. Then it built a launching pad for the Internet age. Now the valley has assumed a leading role in the global competition to develop renewable energy and other clean, green technologies.

Cleantech is poised to be the valley’s third great wave of innovation — not just the next big thing, but perhaps the biggest thing ever. Confronting the peril of greenhouse gases and climate change happens to be a multi-trillion-dollar business opportunity.

“Energy is the biggest opportunity Silicon Valley has ever seen,” declared T.J. Rodgers, the founder of Cypress Semiconductor and chairman of SunPower, a leading maker of photovoltaic panels to produce solar energy.

How big? Consider that the sum of America’s yearly utility bills, one component of the nation’s overall energy costs, exceeds $1 trillion — or nearly triple the annual global revenues of the semiconductor industry. The solar and wind energy markets, which totaled about $80 billion in 2008, are projected to nearly triple in size in 10 years, employing 2.6 million people worldwide, according to Clean Edge, a cleantech research group.

Leading venture capitalist John Doerr of Kleiner, Perkins, Caufield & Byers muses that Silicon Valley may someday be called Solar Valley, given that dozens of solar companies that have sprung up here in recent years.

But solar represents just one aspect of the cleantech revolution. Around the valley, some former e-commerce and software mavens are now busy trying to electrify the automobile industry while other techies are developing energy-efficient glass, drywall and cement. Still others are introducing cutting-edge information technology to the 20th-century electricity grid, working on biofuels and fuel cells, and pioneering new methods to recycle waste, protect air and water quality and enhance agriculture and aquaculture.

The payoff: progress toward a “low-carbon economy,” tens of thousands of new jobs in the valley — and perhaps a new set of corporate titans.

Will Tesla Motors become the Apple of automakers? Will Serious Materials become the Intel of green building materials? Will Silver Springs Networks be the Cisco of the smart grid electricity management technologies — or will that be Cisco itself?

Venture funding surges

One measure of cleantech’s surge is venture funding. Globally, venture capital investments in the sector grew from $908 million in 164 deals in 2002 to $8.5 billion in 567 deals in 2008, according to data compiled by the Cleantech Group and Deloitte.

With Silicon Valley leading the way, California corralled nearly 40 percent of the $5.6 billion in cleantech venture investments worldwide in recession-ravaged 2009. Over the past six years, cleantech’s portion of venture investments has grown from merely 3 percent to more than 25 percent, according to the Cleantech Group.

While venture funding overall dipped in 2009, many governments around the world stepped in to fund cleantech projects. “Governments spent the year earmarking hundreds of billions of dollars for clean technology in pursuit of economic growth,” said Nicholas Parker, Cleantech Group’s executive chairman.

The Obama administration has bolstered the cleantech sector with more than $70 billion in economic recovery funds. Tesla Motors, Solyndra, MiaSolé and Nanosolar are among the cleantech valley startups awarded loan guarantees or tax credits by the Department of Energy.

Who will survive?

“Most of what Silicon Valley is doing is nibbling right now,” said David Victor, former director of Stanford University’s Program on Energy and Sustainable Development. “That said, small organisms must start somewhere — and they start with nibbling. Most of the nibblers will die. A few will flourish. Some might come to dominate the energy system and become trillion-dollar players.”

But the valley, long the world’s leading technology incubator, is hardly alone in its cleantech quest. Texas, for example, is a hub of wind power, while Germany is a leader in solar and Japan in energy efficiency. And China, which dubiously ranks alongside the United States as the leading producer of greenhouse gasses, has embarked on a massive cleantech initiative to confront its environmental woes.

At first blush, cleantech may seem like an radical departure from Silicon Valley’s semiconductor roots. But solar cells are a simple form of semiconductor, and smart grid innovators are essentially integrating 21st-century software efficiencies into a wasteful 20th-century electrical infrastructure. The valley’s expertise in biotechnology is vital to biofuels and its work in nanotechnology is critical to new materials that might find their way into nuclear reactors or a suburban home.

Every aspect of cleantech “needs new science,” said Kevin Surace, CEO of Serious Materials, which has raised $120 million in venture funding to develop low-energy, low-carbon glass, windows and drywall.

The valley’s greatest advantage is its culture of innovation, suggests venture capitalist Vinod Khosla. His firm, Khosla Ventures, which specializes in cleantech investments, raised $1.1 billion in 2009. New Enterprise Associates, a more diversified firm with a sizable cleantech portfolio, later raised $2.5 billion, the year’s biggest fund.

“This is one of the largest new opportunities that Silicon Valley has seen, but competition from other areas will be extensive,” Khosla said. “We (in Silicon Valley) don’t have a natural advantage in talent — like chemical engineers, fermentation experts, engine designers and physicists. But we do have a support culture for entrepreneurship and a culture of risk-taking and risk-funding. That gives us a head start.”

The catalyst for all this investment and innovation is clear, if controversial. Earth, many scientists say, is in a pressure cooker formed by the continuous accumulation of man-made greenhouse gases. Melting glaciers and dying coral reefs, they say, may be harbingers of flooded cities, disappearing species, cataclysmic weather, massive migrations and perhaps violent struggles over scarce water and food.

Believers and skeptics

Much of Silicon Valley has embraced the environmental and economic arguments voiced by former Vice President Al Gore in his documentary “An Inconvenient Truth.” Gore, who forged a political alliance with Doerr, now counts a partnership in Kleiner Perkins among his business activities.

Skeptics, including SunPower chairman Rodgers, question such dire scenarios, often suggesting that climate change reflects natural forces beyond man’s control, instead of the way the planet’s chemistry has been altered by a proliferation of tailpipes and smokestacks and the destruction of rain forest. But even skeptics acknowledge that national security and the nation’s global economic competitiveness would be enhanced by technologies that wean the United States from foreign oil.

The challenge is huge. Valley technologists are accustomed to developing disruptive technologies that quickly create new markets. Desktop computers almost overnight turned IBM Selectrics and adding machines into relics of another age. The Internet was an utterly new medium and marketplace that quickly transformed Yahoo, eBay and Google into major companies and household names.

But re-engineering an economy that has run on fossil fuels since the dawn of the Industrial Age is a daunting task. The infrastructure of vehicular transportation, for example, encompasses vast oil drilling operations, pipelines, supertankers, refineries and gas stations.

Incumbent industries are powerful and have their own agenda. “Exxon has more lobbyists than the entire cleantech industry,” said Brent Constantz, founder and CEO of Calera, which aims to revolutionize the cement industry.

Constantz has testified before Congress about how his technology chemically transforms carbon dioxide from power plant emissions into a carbonate for cement, while oil giants want taxpayers to help them pump it underground.

Yet few cleantech business leaders express discouragement, citing a broadening global consensus regarding the environmental imperative and the attractive market opportunity in tapping solar, wind and other renewable sources.

Rodgers said he was attracted by the solar power opportunity chiefly on economic grounds, implementing it first at his winery in the Santa Cruz Mountains and later at Cypress. SunPower, once a modest startup, was acquired by Cypress in 2002 and later spun off as a public company that now earns twice the revenues of Cypress.

Like many in the valley, Rodgers fairly bristles with confidence that new technologies can solve daunting problems. His other cleantech interests include a Cypress division that is developing a means to enable utilities to massively nudge thermostats in homes and businesses to conserve energy, and another initiative to develop new semiconductor “thermal panels” that “would line America’s exhaust pipes” and turn heat into more electricity.

Rodgers says he’s eager to minimize pollution, though his own reading of the science suggests that global warming is driven more by natural cycles than man’s activities. “I am certainly not an acolyte or even a fan of the Holy Church of the Carbon-Free Atmosphere or its leader, the Reverend Al Gore,” Rodgers, long known for his outspoken libertarian views, said in an e-mail to the Mercury News.

“SunPower is a company, not a cause,” he added. “The first moral principle on which the company operates is that we make products that people want, sell them for a profit and reinvest that profit to grow the company and create high quality jobs.”

Protecting the environment, to hear Rodgers tell it, is a nifty byproduct.

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